New homes are being built in high flood risk areas, and may be uninsurable, warns the Association of British Insurers (ABI) today.

Insurers have so far paid out £1billion of claims following the floods of last summer.

Three million new homes are to be built on flood plains by by 2020, and 13 major developments have been passed despite warnings from the Environment Agency. Seven of the sites, including a bungalow development, are deemed at high risk from flooding.

Justin Jacobs, ABI assistant director of property, said: ‘The government’s ambitious housing plans are in jeopardy unless we reduce the flood risk. Insurers want to continue to provide flood cover, but poor planning decisions will lead to more homes becoming unsaleable, uninsurable and uninhabitable.’

However, John Slaughter of the Home Builders’ Federation said that it was not in their interest to build on flood plains: ‘We want to build homes to meet the housing crisis, but not just wherever … because it’s not in the industry’s interests to do that. We have to think of our members’ reputations long-term.’

The ABI maintains, however, that if new homes are being built in high flood risk areas, they may be uninsurable.

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